Curt Carlson, the president and chief executive of SRI International, is very excited about the Siri intelligent agent technology that his organization sold to Apple in April for a rumored $150 – $250 million. He expects it will show up in future iPhones, but he also believes that SRI’s additional technologies from virtual assistant research will become part of even more rich applications in the future.

SRI was spun out of Stanford University more than 60 years ago to commercialize research. First named Stanford Research Institute and later renamed SRI International, it became independent from Stanford University in 1970 and now has more than 2,200 researchers working on things such as the cool artificial intelligence, speech recognition, natural language processing, location information, and agent technology that is part of Siri.

Siri, spun out of SRI 18 months ago, is a virtual personal assistant technology. Its first application launched in February as a free iPhone app that lets you perform tasks such as making dinner reservations by speaking into your phone and letting a virtual assistant do the rest. Apple bought Siri for an undisclosed price, and Carlson likens the event to Steve Jobs’ prescient move in adopting the computer mouse — invented by SRI researcher Doug Engelbart four decades ago.

“Siri was bought by Apple before it had any revenue for a very nice premium,” said Carlson (pictured at top) in an interview. “You can guess what will be in the next iPhone. This technology could be as ubiquitous as the PC-mouse user interface that was created by Doug Engelbart here more than 40 years ago.”

“I think Doug transformed every personal computer with his invention,” Carlson added. “I believe this technology has the potential to be seen 15 or 20 years from now as the next big revolution in personal computing. Steve Jobs is always prescient. He was one of the first to get a license from us for the computer mouse too.”

Siri can do interesting tasks now. You can speak into your phone that you want to find a romantic restaurant for two in Menlo Park. Siri will ask you if you want it within walking distance of your hotel or if you want Italian food as you liked before. Once you answer, it will send back to your iPhone an Open Table reservation for two at a restaurant that it recommends.

It’s somewhat surprising that something that makes its debut as a free iPhone app could come from SRI, which is known for its heavy-duty research and development that gave us things like automated check processing, the PC, wireless communication, robotics, ultrasound, speech recognition and high-definition TV. But Carlson, who has been CEO for 11 years at SRI, says that the institute’s focus on innovation has never been sharper. He drills lessons about market relevance and the fundamentals of creating value into every new employee — even the janitors. And today, with more than 200,000 iPhone apps, there’s never been a better way to get an immediate read on how useful a technology is.

Siri came from a collection of inventions. SRI had a very famous artificial intelligence group that created a solution with the Defense Advanced Research Projects Agency (DARPA). SRI started doing intelligent agent research in the early 1990s. In 2001, it started a program called Vanguard aimed at making mobile phones into the next computers.

In 2003, SRI got a $150 million grant to start CALO — the Cognitive Assistant that Learns and Organizes — to develop virtual assistant technology over five years. The effort included 25 world class partners and it incubated ideas from government and commercial researchers.

One of the projects that the military is interested in is the Command Post for the Future. It is an assistant for generals in a command post that helps make decisions about how to fight wars or skirmishes.

Commercialization of ideas started four or five years ago under the lead of Norman Winarsky, vice president of ventures, licensing and strategic programs at SRI. In that process, SRI takes its ideas and finds an entrepreneur in residence to make the idea into a startup. If they can figure out a big market opportunity and a compelling business model, they launch it. That’s what happened with Siri. Upon being spun out, Siri got another $24 million from Menlo Ventures and Morgenthaler Ventures.

Sponsored by VB

Join us at GrowthBeat where thought leaders from the biggest brands will share winning growth strategies on August 17-18 in San Francisco. Sign up now!

But Siri isn’t the end of SRI’s research. It is just one part of it. Another startup using the SRI technology is Chattertrap, a Menlo Park, Calif.-based startup that will apply the personal assistant concept to online content. The idea is to create a personal information service by figuring out what kind of news you like and delivering a personalized newspaper to you.

At some point, you want the virtual assistant to be as smart as someone talking to you on the phone and doing Google searches to answer your questions. Speech recognition is a part of the solution, but SRI hopes to aggregate a bunch of technologies that can answer your questions in real-time, even when you are speaking in a conversational manner.

Winarsky said in an interview that “this technology is intended for many more markets than just a phone. I think this is the dawn of the age of the virtual personal assistant. You will be able to use it in everything from healthcare to shopping to sales. Apple bought what they needed to do Siri. But that is just the spark of what could happen here. There are many more applications coming.”

Will it work as advertised? Carlson said, “Even professor John McCarthy at Stanford was working on this 40 years ago. It hasn’t been realized because it turned out to be a really hard problem. This is the Holy Grail.”